Creative Loafing Inc. — which owns alternative weekly newspapers in Chicago, Washington, Tampa, Charlotte and Sarasota, as well as Atlanta — today filed for bankruptcy protection. Prompting the move was a debt load of more than $40 million.
“The company owned more money than it can pay back right now,” CEO Ben Eason said in a conference call with company managers. The bankruptcy petition was filed in Tampa, where the company’s based, and was timed to preclude a interest payment that was owed lenders on Wednesday.
The company will ask federal bankruptcy Judge Caryl Delano to stay any attempt by creditors to liquidate the assets or take control of the company.
“We’re doing the right things,” Eason said. “This will give us a fresh start. It is a reorganization, not a liquidation. Everybody gets paid.”
The debt load was substantially increased last year when Creative Loafing purchased the Chicago Reader and the Washington City Paper. Since then, advertising revenues for the print editions of the papers has deteriorated, as they have for newspapers nationwide. Over the same period last year, revenues were down between 10 and 15 percent.
Among the largest unsecured creditors is Fayetteville Publishing Co., which prints the Atlanta paper and some of the other papers in the group. The Georgia Department of Labor, the Georgia Department of Revenue and the IRS are also among the creditors.
Creative Loafing was founded in 1972 by Debby Eason in Atlanta and later opened several other papers in the Southeast. Her son, Ben, who owned the Tampa paper, acquired the rest of the family newspapers in 2000.